Personal Bankruptcy Complicated Bankruptcy Questions

[anonymo]

I live in Alabama, worked for the state education system for 16 years, so I'm vested. Because of several issues I must file bankruptcy on my home, cars, credit cards etc. I am also moving out of the state. My question is what do I need to do about my pension? I have the option of cashing it out with a 20% penalty or leaving it until my retirement age but I do not know how that will affect the bankruptcy. Also one of the cars has a co-signer and I wonder if I can sign that car over to her before filing bankruptcy. I am thinking of filing in the state that I would be moving but I know laws vary among states.

Thanks,
Cindy

 

[Betty3]

Your best bet would be to talk to a bankruptcy attorney. (Someone you can furnish the amount of your debt & amount of your income/assets to & help you decide the best type of bankruptcy for you to file.)

The attorney will be able to answer any questions you might have.

 

[Proserpina]

If you transfer assets too soon before filing, the Trustee will likely see a red flag - and you could risk the entire filing being tossed.

Most bk attorneys will do a first consultation for free - it's generally NOT a good idea to do bk on your own unless you have an incredibly simple no-asset Ch.7... (and even then, I would still advise an attorney).

 

[Betty3]

What Proserpina said is true. Selling or transferring nonexempt property before you file for bankruptcy can be risky. The bankruptcy trustee can sometimes recover the property & make it part of your bankruptcy estate. (or even possibly toss out the bankruptcy)

 

[despritfreya]

what do I need to do about my pension? I have the option of cashing it out with a 20% penalty or leaving it until my retirement age but I do not know how that will affect the bankruptcy

Unless you need the cash now and don't mind the penalty, leave it. Your state retirement plan is protected from your creditors. If you decide to cash out you will need to find out how much of that cash you can have lying around when you file bk. This will depend upon the allowed exemptions. If you don't need the $$ leave it alone.

one of the cars has a co-signer and I wonder if I can sign that car over to her before filing bankruptcy.

Nope. 1) you cannot transfer title unless you get the lien holder to agree and 2) if you do transfer title you run the risk that the bk trustee will set the transfer aside and take the vehicle - if there is any equity. Leave it alone.

Your next step is to meet with an attorney.

Des.